initial holding deposit

Tenancy Deposits

I had a prospective tenant who completed the NRLA tenancy application form, on which they stated they were a 'teacher at any level' however after doing the employees check it seems the prospective tenant is a learning support assistant, with a big gap in salary from a teacher. having put the applicants salary through the rent affordability checker, they are no where near the level of income needed for the rent. I had to cancel the processing of the application for this reason. Do I have to return the initial holding deposit?
Or this enough for rule 8 to come into play about misrepresenting on the Tenancy Application Form.
I have put lot of time into processing the application, writing to employer, landlord, character reference, and doing a credit check etc. Any advice would be great, thanks Steven